Category Archives: Construction costs

There’s lots of talk of why affordable housing is so difficult. The costs of land and construction are often thrown about as contributing to house prices rising way beyond affordability.

Yet much of those costs are based on anecdote or, at best, modeled information. What about actual empirical evidence?

Beacon and NZIER have set out to rectify this.

Using the actual costs of 69 affordable and social houses build in Auckland in 2015, we’ve built a Cost Tower. This divides costs into 7 categories: Land cost; Land development & infrastructure costs; Professional fees; Construction costs; Council and consenting costs; Finance, valuation and real estate costs; GST.

The Cost Tower shows where the biggest costs fall (Land and construction) and therefore where the biggest impact of reducing costs will be. Large variances between top and bottom quartiles show there is considerable room for improvement. Why are some houses built for so much less than others? That’s a question the Cost Tower will help builders and developers explore.

A visit by Ngai Tahu property to the US revealed that building costs in New Zealand are around 3 times higher per square metre, with around NZ$500-800 per square metre in the US compared to NZ$1500-2500 per square metre here, especially in Christchurch.

Ngai Tahu chief executive Tony Sewell discussed that with Kathryn Ryan and others on Radio NZ and with Stuff.co.nz:

Radio NZ – Nine To Noon, Tuesday 15 October 2013: Tony Sewell of Ngai Tahu Property, Warren Jack from Habitat Auckland and Bruce Kohn from NZ Building Industry Federation CEO talk with Kathryn Ryan in detail about our construction costs relative to the US